The financial report showed an 18% increase in net gaming revenue for the first half of the year. However, online revenue declined by 7%. The decrease in online revenue was attributed to a weaker macroeconomic environment, resulting in customers spending 5% less than the previous year. The company stated that they are somewhat resistant to macroeconomic effects but not completely immune. They observed lower growth in many markets compared to earlier expectations.
The chief financial officer explained that the online revenue fell short of expectations due to a couple of challenges. They noted that while the business can withstand weakening consumer sentiment, it still has an impact. The number of active customers remained strong, but the spending per customer decreased by around 4-5%. The lower-than-expected online revenue is expected to persist throughout the rest of 2022, considering the cyclical nature of macroeconomic impacts.
An analyst predicted that the tougher economic environment will continue to hinder growth into 2023. The company also implemented stricter affordability checks in preparation for the Gambling Act White Paper. However, the decline in spending was primarily attributed to the economic environment rather than the impact of these checks. The delay in obtaining a license in the Netherlands also affected the business, but the acquisition of BetCity is expected to provide access to the Dutch market sooner.
The company remains open to mergers and acquisitions despite the challenging economic circumstances. The chief financial officer mentioned that online comparisons are expected to improve in the third and fourth quarters, with the easing of lockdown effects and improved trading margins. Entain also experienced below-expectation growth in Brazil due to increased competition.
An investment firm noted that the decline in online revenue was slightly worse than anticipated. The company’s share price initially dropped but later rebounded. The firm predicted that the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) for 2023 are likely to hold steady around £1.1bn, higher than their expectations for this year, partly due to acquisitions.
